Conference Information: Challenges and Opportunities of the Chinese Social Credit System

The Foundation for Law and International Affairs and the Coalition for Peace and Ethics are happy to announce that the Conference “Challenges and Opportunities of the Chinese Social Credit System” will be held on September 23, 2017 at the Ko Guan Law School, Shanghai Jiaotong University.

We have made available a copy of the conference program.

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China Launches Action Plan In Bid to Become a ‘Quality Powerhouse’

On September 5, the Central Committee of the Communist Party of China and the State Council issued the ‘Guiding Opinions on Carrying Out the Quality Improvement Action’ (official document here). The 10,000 characters document is a blueprint providing a detailed list of measures to transform China into a ‘Quality Powerhouse’.

By 2020, China intends to:

  • improve quality in products, projects and services, to boost the global competitiveness of Chinese brands, products, and services;

  • Improve the quality of its industrial development, to give life to world-class industrial clusters;

  • Improve quality in all regions, to facilitate the survival of traditional quality brands, and the emergence of regional quality brands;

  • Construct a national quality infrastructure based on measurements, standards, and certifications to enhance China’s global competitiveness, and reinvigorate its external relations.

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MOU on the Joint Punishment of Listed Companies Engaging in Misconduct or Breaches of Trust

Memorandum of Understanding on the Joint Punishment of Subjects of Liability of Listed Companies Who Engage in Misconduct or Breaches of Trust

In order to comprehensively implement the spirit of the 18th Party Congress, and of the 3rd, 4th, 5th, 6th, Plenums, to implement the requests of praising integrity and punishing breaches of trust, posed by such documents as the “State Council Opinions on Promoting Safe Competition and Safeguarding the Normal Order of the Market” (State Council Document no. 20 [2013]), the “State Council Notice Issuing the Planning Outline on the Construction of a Social Credit System (2014-2020)” (State Council Document no. 21 [2014], the “State Council General Office Notice on Further Strengthening the Protecton of the Rights and Interests of Small and Medium-Sized Investors in Capital Markets (State Council Document no. 110 [2013]), the Development and Reform Commission, the SFC, the People’s Bank, the Central Spiritual Civilization Office, the Supreme People’s Court, the Ministry of Industry and Information Technology, the Ministry of Public Security, the Ministry of Finance, the Ministry of Environmental Protection, the Ministry of Transport, the Ministry of Commerce, SASAC, the General Administration of Customs, the General Administration of Taxation, the General Administration of Industry and Commerce, AQSIQ, the China Food and Drug Administration, the Central Leading Group for Cyberspace Affairs, CBRC, the Banking and Insurance Regulatory Commission, the Foreign Exchange Bureau, the National Federation of Trade Unions, on the basis of relevant laws and regulations, rules and normative documents, have reached the following unanimous opinion on the joint punishment of listed companies and related institutions and their personnel who engage in misconduct or breaches of trust.

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Western Rating Agencies Allowed to Set Up in China

Editor’s Note: 

Over at the blog Law at the End of the Day, in a recent post 1 Larry Catà Backer observed how to “understand the construction of social credit in China one must look to patterns of” rules on FDIs relevant to credit investigation and rating services. A fundamental text, in this respect, is  Announcement No. 1 [2016] (available below) on foreign invested credit rating agencies.

The post further discussed how in China’s 2017 Catalogue for the Guidance of Foreign Invested Industries credit investigation and rating services have been moved from the ‘restricted’ to the ‘permitted’ category. The change in status of credit investigation and rating services has been in the making for quite some time.

The existing regulatory framework on credit rating makes only scant references to foreign invested credit rating services 2 Also, as it is well known, the 2015 People’s Bank of China Notice on Performing Well the Preparatory Work for the Credit Reporting Industry had delegated the task to construct the consumer credit rating industry to eight domestic agencies.

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Building the Party’s Governing Capability: Walking the Internet Mass Line in the New Era

Building the Party’s Governing Capability:

Walking the Internet Mass Line in the New Era

August 23, 2017. 11:31:27 – Source: Hongqi Wengao – Author: Nie Mingsheng

Following the development and application of network media technology, information transmission chains and action communication models based on mobile phones, SMS, blogs, Weibo, Weixin and app clients are deeply changing the traditional political ecology and the operational logic of real society. “Digital survival” in the Internet era has opened up entirely new avenues of participation in governance for the people (minqun). It has started a new model of public governance where questions are asked to government, politics is discussed and reasoned about through the Internet. At the same time, the “largest variable” of the Internet brings entirely new challenges to the ruling environment and to the methods of rule. During the Network Security and Informatization Work Symposium, General Secretary Xi Jinping stressed that: “Party institutions and leading cadres at all levels must learn to follow the mass line through the Internet, often use the Internet to understand what the masses think, collect good ideas and good suggestions, actively respond to netizens’ concerns, solve their doubts and clear-up confusion. Therefore, in the new era walking the mass line through the Internet, constantly innovating ruling ideas, ruling modes and methods, earnestly strengthening the construction of the Internet governing capability have become a strategic choice to push forward the construction of the Party’s governing capability.

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Provisional Measures on Managing the Directory of Enterprises With Abnormal Operations

Decree of the State Administration for Industry and Commerce

No. 68

  The Provisional Measures on Managing the Directory of Enterprises With Abnormal Operations have been reviewed and approved by the State Administration for Industry and Commerce. They are hereby published, and will enter into force on October 1, 2014.

Zhang Mao, Director

19 August 2014

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Reply Entrusting Work Related to the Construction of a Credit System in the Power Industry to The China Electricity Council

General Office of the National Development and Reform Commission Letter of Reply

Entrusting Work Related to the Construction of a Credit System in the Power Industry to

The China Electricity Council

National Development and Reform Commission Document No. 1492 [2017]

China Electricity Council:

  Your “Request for Instruction on Conducting Work Related to the Construction of a Credit System in the Power Industry (China Electricity Council Inquiry no. 141 [2917])” has been received.

After consultation with the National Energy Administration our Letter of Reply is as follows.

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Notice of the Ministry of Civil Affairs Issuing Evaluation Indicators for All Categories of Social Organizations

Editor’s Note: the original version of this document is followed by four annexes containing the evaluation indicators to be used for different categories of NGOs. The annexes are not included to this translation, because central-level evaluation indicators issued in 2011 were subsequently revised.

Notice of the Ministry of Civil Affairs Issuing Evaluation Indicators for All Categories of Social Organizations

To the Civil Affairs Offices of all provinces, autonomous regions, municipalities directly controlled by the central government, to the Civil Affairs Offices of cities enjoying provincial-level status, and the Civil Affair Office of the Xinjiang Production and Construction Corps:

Since the issuance of the Ministry of Civil Affairs Guiding Opinion on Promoting the Evaluation of Non-Governmental Organizations (Ministry of Civil Affairs Document no. 127 [2007]) in 2007, civil affairs offices at all levels have actively carried out the evaluation of social organizations according to the requirements of that document, and have achieved good social results. Through evaluation, social organizations strengthen their own construction, raise their capacity, and they gradually increase their credibility. In 2010, the Ministry of Civil Affairs issued a Notice on the Program for Promoting Standardized Management in the Field of Civil Affairs (For Trial Implementation) (Ministry of Civil Affairs Document no. 86 [2010]), incorporating the evaluation of social organization in the project of standardization of the management of civil affairs. In December 2010, the Ministry of Civil Affairs promulgated the Measures for the Evaluation of Social Organizations (Ministry of Civil Affairs Decree no. 39), which further provided the policy and legal basis to perform the evaluation of social organizations.

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Notice on Lowering the Service Fees of Credit Reference Centers of the People’s Bank of China

National Development and Reform Commission Notice on

Lowering the Service Fees of Credit Reference Centers of the People’s Bank of China

Development and Reform Commission Price Regulation Document no. 1232 (2017)

People’s Bank of China:

In order to carry out the strategic decision-making deployments of the State Council, to further ease the burden on enterprises, to optimize the developmental environment of the real economy, to promote the development of the real economy and the construction of a social credit system, matters relevant to the standard for service fees of your credit reference centers are hereby notified to you, based on relevant stipulations of the “Regulations on Managing the Credit Reference Industry”:

1. The standard service fee for queries on enterprises credit reports by commercial banks and other institutions is lowered from 60 Yuan per report to 40 Yuan per report. The standard service fees for query on individual credit reports is lowered from 5 yuan per report to 4 yuan per report. The actual standard is determined according to the quantity of data provided by the credit report system to the user organization, and by the amount of queries conducted. The specific computation formula and fee calculation method are described in the appendix. Read More

Is the People’s Bank of China Preparing to Issue its Own Digital Currency?

On August 31, 2017 the Financial Times reported how Barclays, Credit Suisse, Canadian Imperial Bank of Commerce, HSBC, MUFG, and State Street have joined forced to work on the “utility settlement coin”, a digital coin that will make transactions on the financial market more efficient. The utility settlement coin, however, would become obsolete if central banks issued their own digital currency.

The option to issue its own digital currency has been considered by the People’s Bank of China, at least since 2016. The following 2,250-words article was published on the official website of the Legal Daily in 2016. It provides a generic description of some of the steps the People’s Bank of China has been taking to prepare to issue its own digital currency, at a time when mobile payments are already quickly replacing cash, and there is a consensus that digital currency will help the construction of a social credit system.

(…) Digital currency is still at the research stage, and the stage of distribution may still be very far. Further efforts in such fields as theory and technology are still needed. The central bank needs several matching systems to issue digital currency, which may take a long process. If the central bank will start to issue digital currency in the future, existing laws, regulations and rules in the financial sector will need to be revised. Digital currency it is furthermore of broad concern to society.

Recently, the Printing Science and Technology Research Institute of the People’s Bank of China published a recruitment notice aimed at recruiting “Digital currency research and development technology personnel”. This year, in a series of surprising moves, the People’s Bank of China has held a digital currency seminar to prepare the creation of the Digital Currency Research Institute, which includes the recruitment of “digital currency research and development technology personnel”. (…)

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